WORLD OF ISLAM TRUST, ISLAMABAD VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2008 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 591 (2004)

Income Tax Ordinance (XLIX of 2001)---

----S.2(36)---Income Tax Ordinance (XXXI of 1979), S.47(1)(d)---Income Tax Rules, 2001, R.214---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Non profit organization---Allowance for donations for charitable purposes---Delay---Inordinate delay of almost 13 months in processing application for renewal/approval filed under S.2(36) of the Income Tax Ordinance, 2001---Validity---Department reported that application was not attended to in time because the office was under constraint to meet the budgetary targets and all efforts were focused on the point---Lapse was regretted and it had been informed that approval had now been renewed---Regret expressed on the admitted lapse was acknowledged by the Federal Tax Ombudsman and his prayer for closing the investigation was granted with the observation that positive appreciation of lapse caused by inattention to the matter and expression of regret over it was made to be realized down the line---Federal Tax Ombudsman recommended that it will be appreciated if a reasonable time frame was laid down by the Regional Commissioner of Income' Tax for processing of such matters---Investigation proceedings were closed by the Federal Tax Ombudsman.

None for the Complainant.

Irfan Raza, Special Assistant to CIT Companies Zone, Islamabad for Respondent.

FINDINGS/DECISION

JUSTICE (RETD.) SALEEM AKHTAR (FEDERAL TAX OMBUDSMAN).---Maladministration is alleged in the instant complaint on the part of the Taxation Officer, Circle 14 and CIT Companies Zone, Islamabad for inattention to complainant's application for renewal/approval filed under section 2(36) of the Income Tax Ordinance, 2001 (the Ordinance) on 30th June, 2003 and for causing inordinate delay of almost 13 months in processing the application till filing of the complaint on 17th July, 2004.

2. Briefly, the facts are that the approval granted to the complainant Trust under section 47(1)(d) of the Income Tax Ordinance, 1979 (Repealed Ordinance) had been renewed up to December 31, 2003 vide corrigendum No. SO-III-26(316)/2000-2001/4362 dated 2-1-2002 issued by AC (HQs) Northern Region, Islamabad.

3. Application for approval under rule 214 prescribed under section 2(36) of the Ordinance was filed on 30.6.2003. Applicant's Representative Mr. Mensoor-ul-Haq, Advocate visited office of Commissioner Income Tax Companies Zone, Islamabad several times and met Mr. Insar, Inspector who was handling the case at that time. He said that there is pendency of so many old cases and assured that the approval will be granted within few months. A written reminder was given in December 2003 followed by a detailed letter addressed to the CIT in March 2004. The CIT called for a report in April 2004 from Circle 14. Positive report was submitted by Taxation Officer through the Additional Commissioner, Range-IV in the last week of April, 2004. The CIT advised the complainant's counsel when he approached him in May that he may check in the last week of June because till then the Zone will be busy in recovery/collection of tax demand proceedings to achieve the budget target. When he called upon the Commissioner in last week of June he was assured that all the requirements have been fulfilled and the certificate will be issued in 1st week of July. However, in 1st week of July the Commissioner of Income Tax said that the law has been changed from the 1st July 2004 and the Trust must fulfil the required condition of the Notification issued by CBR dated 5th November 2003.

4. Responding to the notice under section 10(4) of the Ordinance XXXV of 2000 (the FTO Ordinance) the RCIT, Northern Region, Islamabad has stated that the Commissioner of Income Tax Companies Zone, Islamabad has reported that at the time of processing the application of the complainant, the financial year was coming to the close, and his office was under constraints to meet the budgetary targets. All efforts were therefore, focused on that point. Resultantly application for renewal of approval under section 2(36) could not be attended in time. The lapse is however, deeply regretted. It has further been informed by the CIT that approval under section 2(36) has now been renewed.

5. Mr. M. Irfan Raza, Special Assistant to the CIT, Companies Zone, Islamabad is present for personal hearing and presents the copy of Approval Certificate issued on 11-8-2004 valid up to June 2005. None is present for the complainant.

6. The regret expressed by the RCIT on the admitted lapse is acknowledged and his prayer for closing the investigation is granted with the observation that this positive appreciation of lapse caused by inattention to the matter from July, 2003 till a report was called from the Circle by the CIT office in April 2004 and expression of regret over it by the worthy Regional Commissioner is made to be realized down the line. It will be appreciated if a reasonable time frame is laid down by the RCIT for processing of such matters.

7. Investigation proceedings are closed.

C.M.A./315/FTOOrder accordingly.